Sense Arena: You must always innovate, even in sports

‍Czech Sense Arena became a standard in using virtual reality in practising in the NHL. Now, with the help of an investment from J&T Ventures and other investors amounting to three million dollars, it’s heading to other sports, as well as to digital worlds in metaverse. The company founder Bob Tetiva describes how the company managed to succeed in the USA, and how close it was to failing.

We heard about Sense Arena for the first time four years ago, when it succeeded in the Vodafone competition Idea of the Year. Back then, you dealt with the first installations of VR trainers in the USA. How far did you get in the meantime?
It turned out how much business is affected by circumstances one cannot influence and predict. Four years ago, we had a clear vision and a clear plan, and yet we eventually ended somewhere else than what was planned originally. Metaphorically speaking: we wanted to go north, and now we’re running west. It’s not that we’re not able to fulfil our goals; but we do some things differently. In our field, development is so fast that four years is like a giant leap.

But still, looking from outside, it seems you stick to the original plan - to get your training solution to as many hockey teams as possible, both in the NHL and in other competitions.
We still create what we wanted from the beginning: a training platform for the development of sports skills. Not only for hockey, in which we have succeeded already, but also for other sports, which we are about to announce. However, our innovationis based on innovations of large world players in the area of virtual reality, such as Facebook, HTC, or Sony. Their huge train is heading in one direction, and our small local engine still keeps up with them. They’re helping us by creating a technological base for our services, and we’re helping them by making their facilities alive thanks to our content. Nevertheless, one cannot estimate what these companies can give to the world in the next three or four years - and so we have to be ready to respond. And moreover, covid jumped in this continuous transformation.

What exactly did you have to change?
We assumed that clubs and training centres would be our customers. But due to covid, they closed their doors, and everything changed. In the end, however, it helped us, paradoxically, because an even greater world opened up to us. Sportsmen wanted to continue to improve and practise at home, and we switched the entire focus of the company to the B2C sector. We still deal with clubs, but on a much smaller scale. We became a transactional Internet business, selling large numbers of licences daily to households, parents, and sportspeople themselves.

Does that mean that B2C segment is currently bigger for you than B2B?
Moderately speaking. B2C makes 90 % of our turnover.

How did you manage to execute such a major transformation so fast?
When training centres closed in March 2020, I had to release several people and decide what to do. However, at the same time, Facebook, or Meta today, released the Oculus Quest facility designed for households - and we already had a product for it in production. The availability of technologies changed significantly; suddenly the price of a single facility dropped from 10,000 dollars to several hundred. We were ready for the change, and in 2020, we already released the first B2C product for goalies, which was tremendously successful. By the end of the year,40 goalies from the NHL were using it, which helped promotion significantly. However, everything was on the verge of ending for us, if it hadn’t been for the fact that a commercial facility appeared on the market at the right moment for 500 dollars. Sometimes, you just need a bit of good luck.

Did the issues you deal with inside the company transform as well over the past four years?
The company has moved on from a classic technological start-up in which everything evolves around the actual technology. It is not only about a great product, but also about how to deliver it to people effectively, and how to take care of them afterwards. Moreover, please bear in mind that we have a product, which a vast majority of population doesn’t know at all and has never before encountered - and I’m not talking about Sense Arena now, but about the entire VR, which is still a baby. That’s why we built a strong marketing and business team, which had to come up with a correct marketing mix to suit today’s modern environment, including influencers and ambassadors, and build credibility for the product.

How difficult was it to come to America in thebeginning and start to offer an unknown product? Did anyone even listen to you?
Surprisingly, yes.Although it was tremendous tress at times, whether what we came with would evenwork, because the technology was rather unstable back then. The next questionwas whether we’d meet people whose heads were open enough to allow them to seethe end of the path based on the prototype. Luckily, North American mentalityis open to new things, and a number of people gave us a chance. We made anumber of realizations back then, which might no longer be functional today,and maybe the customers would not actually mark them as great success, but theygave us a chance to come forward and they opened doors for us. Even partialfailures were important; without them, we wouldn’t have five NHL teams amongour customers.

How difficult is it to sell rather sophisticated technology to people who make their living on hockey?
Naturally, you’ll come across conservative people who don’t feel like experimenting, and they continue to build on what worked 30 or 40 years ago. But that is not the path to success. Progress is continuous, and even an amateur must see that hockey today looks nothing like in the past. And when the game is different, practising must be different, too. However, in the United States, almost everyone is trying to find a competitive advantage to get ahead of others, because nobody can take anything for granted in there. The pressure of competition is enormous, and people are used to it from childhood.

You chose J&T Ventures as an investor together with Miton. Was that influenced by your participation in the Idea ofthe Year, which J&T Ventures co-organizes?
It certainly helped that we had already known each other for some time. Investments do not happen by a phone call, a presentation, and a deal. It is a long-term process of getting to know each other and earning trust. The first discussions regarding the investment took place some three years ago, but back then, we could not rely on business success, which a fund administrating money of private investors needs to see. About a year ago, we re-opened the discussion, as we are about to make a significant step forward, and we need the next round of investments to do it. And then, the negotiations were really quick.

How do you choose your investors?
Money is always the same, so it is more important if the investor can come up with something more, something you cannot monetize in bank notes - contacts, access to new markets. Wedding with an investor always represents a kind of a public declaration of your success, too. When a significant brand is interested in you, your perception moves greatly, and in this respect, there is a difference between private investors and a regulated fund. And then, you also need to find a matching approach to business, so that the investor doesn’t hold you back with his demands.

How big is your company at the moment?
So far, we are still relatively small; there are 40 of us in branches in Prague, Brno, Boston,and Toronto. However, we grew by 25 people over the past six months, and with respect to projects we’re about to introduce, we have a potential to double the number again during the next six months. We’re launching into new sports, and sports metaverse is another big issue for us. With the technological assets and commercial know-how, we possess, it would be a sin not to continue blowing in that balloon. However, that requires top-quality people, and that’s what the J&T Ventures investment is about to finance in the first place. We will enforce both quantity and quality. A year ago, I could not afford a marketing manager, but now we have one. And investments in marketing represent another reason for the second round of financing.

Will you continue your presence in the Czech Republic, since you have a majority of customers in America?
Technological know-how is at top level in the Czech Republic. Just look at how many worldwide companies have their development centres here. The price of work naturally plays a role, too. And we make our hardware in the Czech Republic, too,although we experimented with production in North America. But it does not payoff. On the other hand, we continue to move business and marketing activities to the United States more and more.

Hockey in your portfolio is about to be complemented with other sports. Is your product easily transferable?
The simulation ofthe given sport’s physics is key. We divide them to swing sport, when I’m holding some tool in my hand and I play by means of a swing, and ball games. We know the technology of swing sports. They include, for example, table tennis, tennis, golf, hockey, floorball, and so on. The technology for ball games has not really been processed so far, but we are extremely interested in it, and we want to take the step in this direction, too.

If you consider VR as an unknown area, then metaverse is a complete sci-fi. And yet you see business opportunity in it,too?
We believe that ecosystem, although it’s really only emerging. All the individual features are being established now, there is evolution, a tournament of ideas. It was very similar, for example, with mobile Internet. Dominant facilities are being determined, together with services, payment methods... But what remains is the fact that people want to do sports, and we want to extend their sports experience with something they cannot enjoy in normal life - to see places thousands of kilometers away, to become famous, to experience new emotions. Our aim is to make sports richer with digital features, not to make people sit down on chairs and pretend to do sports.

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